When discussing financial inclusion and financial services, clean land records are often overlooked as a subject. However, without clear and updated land records, the foundation for financial services crumbles. While the JAM trinity has undoubtedly made strides in financial inclusion, a closer examination of household finances reveals a stubborn persistence of informal, unsecured borrowing. It is tempting to attribute this to financial illiteracy, but we must confront a more systemic issue: outdated land records infrastructure in a few of our states.
Why Land Reforms Are The Need Of The Hour
Studies have shown that secure land tenure is a prerequisite for economic stability and growth. Several reports by the World Bank have highlighted that clear land titles significantly enhance access to credit. In rural India, where agriculture is the primary source of livelihood, this is especially crucial. Moreover, the lack of clear land records disproportionately affects marginalised communities. Women, in particular, suffer from insecure land tenure. The Food and Agriculture Organization's (FAO) 2018 report on Gender and Land Rights illustrates that women with secure land rights have greater access to credit and higher levels of income.
However, India's land records are often outdated, incomplete, or riddled with inaccuracies. This inefficiency stymies financial inclusion by perpetuating uncertainty and risk in lending.
India being a land-scarce country proportional to its population, the need for improving the land record system becomes all the more important. According to a 2017 NCAER study, by 2050, India's land per capita is anticipated to plummet to one-fourth of its current value, starkly contrasting with China and Brazil. In these two countries, the land per capita by 2050 is expected to be four and 20 times greater than India's, respectively.
The DILRMP Initiative
This is precisely why the Union government introduced the Digital India Land Records Modernization Programme (DILRMP). Launched in 2016, DILRMP aims to modernise the management of land records, minimise the scope of land/property disputes, and enhance transparency in the land records maintenance system. The programme, which evolved from the earlier National Land Records Modernization Programme (NILRMP) initiated in 2008, operates as a Central Sector Scheme with 100% central government funding. With an outlay of Rs. 875 crores, the scheme has been extended from 2021-22 to 2025-26, incorporating new components like the computerization of all revenue courts and the integration of Aadhaar numbers with Records of Rights (RoR). This initiative addresses the diverse and complex nature of land administration in India, marked by variations in language, culture, regions and socio-economic factors, emphasising the need for accurate, updated, and easily accessible land records.
Progress under DILRMP has been substantial, particularly in the computerisation of land records and cadastral maps. As of December 31, 2023, computerisation of Records of Rights (RoRs) had been completed in 95.09% of villages, covering 6,25,137 out of 6,57,397 villages. Notably, 15 states and Union Territories have achieved near-complete computerisation of RoRs, including Goa, Gujarat, Karnataka, and Maharashtra. Additionally, more than 68% of cadastral maps have been digitised across 28 states and union territories. The computerisation of registration processes is also progressing well, with over 93% completion in 29 states and union territories, and more than 75% of Sub-Registrar Offices integrated with land records.
The Need For States To Work Together
However, one should acknowledge that land is a state subject and land rights are a multifaceted bundle of entitlements that make unlocking this potentially unproductive asset a complex task.
Once the land records are digitised, every plot of land, both urban and rural, can be assigned a 14-digit alphanumeric Unique Land Parcel Identification Number (ULPIN), colloquially known as Bhu-Aadhaar. Launched in 2021, this initiative is part of the DILRMP.
ULPIN leverages technology, using hand-held devices to lock in latitude and longitude coordinates and integrate land records with satellite imagery. However, the implementation is still slow. The states where the percentage of ULPIN and SMAVITVA ULPIN issuance (out of total land parcels) is still lower are Himachal Pradesh, Haryana, Punjab, Rajasthan and Uttar Pradesh (excluding NE states).
A Case For Digitisation
Thus, the computerisation and strengthening of revenue administration are relatively straightforward, facilitated by a standardised template for registration and record of rights across the country, which also addresses multilingual issues. However, the real challenge lies in updating the land records.
Digitising cadastral records is relatively simple, but the quality of these existing records can be questionable. Issues arise from the age and consistency of these records, which often lack latitude and longitude data and may have elevation and projection discrepancies. These inconsistencies need to be validated through aerial, field, or satellite surveys.
SMATIVA scheme has helped in this. Utilising drone technology for precise land mapping, it provides legal ownership cards to villagers. Additionally, SVAMITVA supports the determination of property tax, directly benefiting Gram Panchayats in states where it is devolved or augmenting the state exchequer otherwise. The creation of survey infrastructure and GIS maps is a crucial component, providing valuable resources for various departmental uses and supporting the preparation of high-quality Gram Panchayat Development Plans (GPDP).
A total of 3,04,862 villages have undergone drone surveys, leading to the digitisation of 9,29,91,300 parcels. From these efforts, 2,53,805 maps have been handed over to state authorities, and 1,58,562 maps provided for public inquiry. Additionally, 1,21,593 property cards have been prepared, with 72,712 cards distributed to property owners. Unfortunately, the survey has not commenced in states like West Bengal and Bihar. The highest number of surveys and subsequent property card distribution has been done in Madhya Pradesh, Haryana and Uttarakhand.
The Road Ahead
Still, a lot needs to be done to achieve universal ULPIN and SMAVITVA coverage. Apart from this, making land markets efficient requires that the land records have information on any previous encumbrances, such as liens or disputes.
This is an important aspect for lenders. Further, real-time updates are essential to reflect the latest changes in ownership and rights, directly impacting a creditor's decision to lend. State governments should ensure that these digitised land records have all this information and are updated in a timely manner. The Union Budget should also nudge states that have not made adequate progress towards land market reforms.
(Bibek Debroy is an Economist and Aditya Sinha is a public policy professional.)
Disclaimer: These are the personal opinions of the author